LONDON Feb 28 German Bund futures edged lower
on Thursday as investors took stock of Italy's political
stalemate, with concerns over possible fresh elections offset by
the European Central Bank's bond-buying backstop.
The crisis following indecisive election results in Italy
deepened on Wednesday when two party leaders ruled out the most
likely options to form a government, raising the chances of a
However, Bund futures fell 13 ticks versus
Wednesday's settlement to 144.96, in line with after-hours
trading, as an overnight recovery in equity markets weighed on
demand for less risky and lower-yielding German debt.
"Either investors expect Italy to solve its problems or they
expect the ECB to step in (in) case of need," Nordea's chief
European analyst Holger Sandte said in a note.
The ECB's promise to buy bonds, made last year to halt an
investor exodus from the euro zone's lower-rated debt, has
helped to limit the selloff in Italian bonds. Italian BTP
futures were 40 ticks higher on the day at 109.29.